From Market News: "Portugal's President Anibal Cavaco Silva is prepared to accept the
resignation of Prime Minister Jose Socrates and is getting ready to call
an election to choose a new government, Portuguese daily Jornal Publico
reported on its website Wednesday evening....The political instability that would ensue from a collapse of the
government, combined with market tensions that have pushed Portuguese
ten-year bond yields to a euro-era high above 8%, seem likely to
increase the pressure on Lisbon to seek a financial aid package from the
European Financial Stability Facility and the International Monetary
fund." Look for Portuguese, Irish and all out toxic fallout (pardon the pun) to be bought with impunity by JC Trichet as the entire market goes bidless.

The news comes as the Parliament nears the end of a debate on the minority Socialist government's proposed package of new austerity measures amid strong signs that the bill will be defeated. Rejection of the measures, which are strongly endorsed by Portugal's European Union partners, would amount to a vote of no confidence in Socrates' government.

Socrates is planning to meet with Silva at 19h00 GMT/1500 EDT, and it is widely anticipated that he will tender his resignation in that meeting if the parliamentary vote goes as is widely expected. Socrates is scheduled to address the nation at 20h00 GMT/1600 EDT this evening.

Never too late to load up on those Irish CDS. Just for heaven's sake do not use Citi, Bank of America, JPM, Goldman, Deutsche, RBS, Barclays or BNP as counterparties.